Who's Buying What in Biotech? Investment and Business Trends Driving Biotechnology

Abstract

In This Issue.

2005 marked the 25th anniversary of the first biotechnology IPO. In the ensuing years, investment firms that have a sophisticated understanding of both the complex science and business of biotechnology remain bullish on the industry because of its ability to dramatically outperform the S&P 500 during biotech stock market surges. The major challenge for the biotechnology industry now is to find solutions for the current gap in financing for early-stage companies--a shortfall that threatens to disrupt the flow of new innovations into the biotechnology and pharmaceutical industries. We argue that it is imperative for the health of the pharmaceutical industry to continue to support a large, fragmented pool of biotechnology companies to ensure the creation of a variety of new approaches to drug discovery and therapy. In this report, we review trends in biotechnology in 2005, particularly in the context of biotechnology dealmaking. This perspective is important because deal-making activity reflects the current thinking and direction of both the business and science of drug discovery.